TIGA Urges Developers to Rally to the Cause and Win Games Tax Relief

TIGA, the association representing games developers and digital publishers, warned today that one final hurdle had to be surmounted before Games Tax Relief (GTR) could come into effect: assuring the EU Commission of the case for GTR. TIGA pledged to make a compelling, convincing and constructive case for GTR to the EU Commission.

TIGA made the comments following the European Commission’s decision to open a formal investigation into the case for GTR. The UK Government remains committed to GTR and still plans to introduce it in the current Finance Bill.

Dr Richard Wilson, TIGA CEO, said:

“The EU Commission’s decision to launch an investigation into the case for GTR is a very disappointing hold-up which if prolonged could jeopardise much needed investment and job creation in the UK’s games industry.

“Yet this is a delay, not a defeat, in TIGA’s five year campaign for GTR. Both the French Video Games Tax Relief and the UK’s Film Tax Relief were also subject to an investigation by the EU Commission before they were introduced. The UK games industry needs to surmount one final hurdle before GTR can be enacted: we must make a compelling, convincing and constructive case to the EU Commission of the merits of GTR.

“TIGA strongly believes that video games can be cultural products. Yet there is a market failure in the supply of culturally British video games. Many games are made overseas because of the tax credits that are available and so many culturally British elements are lost or replaced by those of the nation making the games. Of the games that are still being made in the UK they are increasingly being made with an international or Americanised theme.

“TIGA contends that there is a market failure in the supply of finance for games developers and digital publishers. Limited access to finance has a negative impact on the supply of capital for the production of culturally British video games. Many of our key overseas competitors benefit from tax breaks for games production. The UK does not and so investment has been diverted away from the UK. Additionally, creative businesses such as games development studios, find it harder to raise finance in comparison to non-creative businesses. This is partly because of a lack of collateral and the intangible nature of IP.

“GTR addresses these challenges. Firstly, GTR should enable more studios to self-publish and so keep a British feel in their games. Secondly, GTR will reduce the cost of games development in the UK and so could incentivise global publishers to take more of a risk on developing games with a British character.”

“The market failure in the production of culturally British video games has been amplified by the absence of any big funding companies in the UK, including traditional publishers.

“The UK games industry has lost investment, jobs and projects over the last five years because of the absence of GTR. It is therefore vital that the UK games industry provides the EU Commission with all the necessary information that it needs as promptly as possible so that GTR can proceed. TIGA will work closely and constructively with the UK Government to make a compelling case for GTR to the EU Commission.”

TIGA urged games businesses to contact TIGA with information about:

· games that have been cancelled but which might have gone ahead if GTR had existed;

· games that have been ‘Americanised’ and which have lost elements of their ‘Britishness’; and

· platforms and business areas where the UK suffers in comparison to other countries.

Information should be sent to: richard.wilson@tiga.org TIGA aims to gather the evidence from the development and digital publishing sector and present a coherent case for GTR to the EU Commission.

Notes to editors

The EU Commission investigation into the French video games tax relief lasted approximately 12 months. It was ultimately given the green light by the EU Commission.

About TIGA:

TIGA is the trade association representing the UK’s games industry. The majority of our members are either independent games developers or in-house publisher owned developers. We also have games publishers, outsourcing companies, technology businesses and universities amongst our membership. Since 2010, TIGA has won 14 business awards and has been nominated a finalist for 16 other awards.

TIGA's vision is to make the UK the best place in the world to do games business. We focus on three sets of activities: political representation, generating media coverage and developing services that enhance the competitiveness of our members. This means that TIGA members are effectively represented in the corridors of power, their voice is heard in the media and they receive benefits that make a material difference to their businesses, including a reduction in costs and improved commercial opportunities.